Letter: To limit liability is to encourage irresponsibility

JP Morgan Chase, and many other financial firms, made billions selling almost worthless mortgage backed securities, an often deliberate fraud which lead to the 2008 financial crisis.

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Rockford Register Star

Writer

Posted Nov. 7, 2013 at 5:00 PM

Posted Nov. 7, 2013 at 5:00 PM

JP Morgan Chase, and many other financial firms, made billions selling almost worthless mortgage backed securities, an often deliberate fraud which lead to the 2008 financial crisis.

Yet, some claim it is an outrage that the government should ask JPM to pay for "mistakes" when, like many companies, it acquired assets (at bargain prices) in 2008. When a company is bought, all its liabilities as well as its assets go with it. Otherwise, corporations could escape liability for any misconduct simply by being bought out by another company.

As things are, employees of Wall Street firms take big risks with other peoples' money. If they are right, they "earn" huge bonuses. If they are wrong, they pay no penalty. Others pay for their mistakes.

Freedom is being responsible for one's own actions. Yet, when corporate executives are guilty of misconduct, it's shareholders who pay.

To limit liability is to encourage irresponsibility. When those in control are not held accountable for their actions, that's tyranny.

It's grotesque that the Gulf oil spill did billions worth of damage, yet Halliburton's legal liability was limited to $200,000! But that's the payoff for oil companies' political contributions.